Operational Resilience: The Difference Between Surviving And Thriving In the Social Sector

It's hard enough to plan for what we know could go wrong, let alone an incident we weren't anticipating at all. Would you have thought about the possibility of a global pandemic?

Nonprofits are tasked with tackling some of society's most difficult issues such as climate change, poverty, or disease, and are often underprepared when met with unexpected disasters. While it’s important that they stay focused on increasing their capacity to serve, they tend to put off having conversations (through no fault of their own) about how to make that work sustainable in the long run.

The best way to do this is to start building ‘Operational Resilience’.

One global consulting firm defines this phrase as an organization’s ability to detect, prevent, respond to, recover and learn from operational disruptions that may impact the delivery of important business and economic functions or underlying business services.

As someone who has spent a little over ten years working in the social sector, I define this as a nonprofit’s ability to meet the needs of a community in the event of operational disruptions without sacrificing timeliness or quality in the delivery of services.

It’s also about building two things:

1. The buoyancy to recover from disruptions
2. The reflexes to grow more and more responsive

Resilience is a process that starts when organizations consistently invest in their capacity to respond effectively to unexpected situations or, put simply, it’s when organizations invest in preparedness.

Let’s think about it — it’s like building a muscle that will help organizations adapt more fluidly to a crisis. This means having a system or systems in place that make it easier to respond (and not react) during an emergency.

The challenge is that up until this pandemic, most funders have shied away from investing in this muscle. Now more than ever, it is clear that investing in an organization's capacity to meet its mission must involve a continuous process or risk extinction. The Nonprofit Finance Fund (NFF) conducted a State of the Sector Survey in 2018 of almost 3,400 nonprofit leaders across all 50 states. Of the nonprofits responding, 86% reported that demand for their services continues to rise. A majority of organizations were unable to meet the demand for their services in 2017 and did not anticipate being able to do so in 2018.

More recently, in 2020 NFF conducted a brief survey of nonprofit leaders to help funders and investors understand how to assist the sector during the COVID-19 crisis. From a total of 465 respondents from various nonprofit sub-sectors, 60% of nonprofit leaders reported currently experiencing destabilizing conditions that threaten organizational financial stability.

Nonprofit organizations are often called to the frontlines during an emergency, so it’s critical for them to be able to perform their work in a timely manner and with all of their resources intact. Operational resilience becomes extremely important here because it is what makes nonprofits more effective when it comes to supporting other communities. An organization’s ability to move from point A to point B (quite literally to transport supplies or to receive funds and get them into the hands of grantees) should not be taken lightly.

There are three key actions that will strengthen the operational capacity of an organization to carry out good work in the social sector.

1. Receiving unrestricted funds – This is a big deal in so many ways because first and foremost, it trusts the recipient to spend funds how they deem fit. It gives the organizations that are receiving funds the room to be agile rather than constantly operating from a place of scarcity.
2. Receiving investments towards training and upskilling employees in program evaluation and other areas – Creating a culture of learning is how organizations can build a habit around improving their operations and overall responsiveness.
3. Receiving investments towards administrative/digital infrastructure – Having the right tools can help people in almost any job move faster. I mean, how easy is it to collaborate on a Google Doc or Spreadsheet? How much better would it be to have everyone use the right project management tool for planning and tracking purposes? Whether it’s a tech platform to help you better manage workflows, or an investment in developing a good website, the social sector must keep up with the digital transformation that will enable organizations to respond more quickly to change and meet the needs of communities.

Solid operational systems will be critical for the social sector to thrive or even survive given the unpredictable nature of our times. And while there are many strategies that can be employed to build operational resilience, the benefits of implementation can extend well beyond the operational level: embracing the idea of operational resilience can help do away with the overhead myth in the nonprofit sector. Understanding why it is important to invest in an organization's capacity to respond can help us create a culture that will not penalize funders for doing this.

Can you imagine seeing a nonprofit’s “operational resilience” score on Charity Navigator or GuideStar? By understanding the true costs of running an organization, we can train every stakeholder in the social sector to ask deeper questions about what it takes to build and sustain a nonprofit that can help communities thrive.

How have you built operational resilience in your organization?